Asian shares decline as China-US trade war intensifies; Japan’s Nikkei down 5.6%

Japan’s benchmark Nikkei 225 led the regional decline, with the index dropping by 5.6 per cent in early trading. By mid-morning in Tokyo, the index was down 4.7%, settling at 32,969.95.

A sharp decline followed as US President Donald Trump’s trade war with China escalated, which initially helped pull Japan’s Nikkei 225 share index.

South Korea’s Kospi index fell 1.6% to 2,400.34 as traders weighed the long-term implications of escalating tariffs and potential retaliatory measures by China. In Australia, the S&P/ASX 200 index dropped 2.1%, closing at 7,552.10 — analysts pointed to global uncertainty stemming from mixed messages about US tariff policy as the primary driver behind the decline.

The declines in Asia followed a steep sell-off on Wall Street Thursday. The S&P 500 plunged 3.5%, undoing much of Wednesday’s 9.5% surge that had come after Trump announced a pause on many tariffs.

US-China tariffs war

The sudden move to hike tariffs even further came after President Donald Trump’s executive order raising tariffs to 125 per cent, up from 84 per cent.

It also included an additional 20 per cent tariff specifically targeting fentanyl-related imports, previously imposed on China, pushing the cumulative tariff rate up’.

Meanwhile, China refused to back down against America’s aggression, and its 84 per cent tariffs on US imports came into effect at 12.01 pm on Thursday, according to the Chinese state news agency, Xinhua.